GNUS - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Genius Brands International Incorporated Third Quarter 2017 Financial Results and Business Update Call. At this time all participants are in a listen-only mode. [Operator Instructions] I would now like to turn the conference over to your host, Mr. Michael Porter. Thank you. Mr. begin. may you Porter,

Michael Porter

Good XXXX welcome and third conference operator. Genius business to Brands call. International quarter afternoon you, everyone and the update Thank financial results

Company's is on the Hershinger, Financial Andy call me Chief Officer; today Joining Heyward, Ms. the Company's the Chief Officer. Rebecca Executive and Mr.

should, statement. may, securities forward-looking similar expect, we the statements and believe, statements. Before Harbor meaning I might, laws. this predict, in of plan or regarding forward-looking read will expectations statements begin federal current Words expressions the within as such conference will, Safe the continue, are project, estimate, the Certain call statements anticipate, belief of constitute intent, forecast, or can

on believes disclaims company's expressly SEC. to further, a the which afternoon, the Andy of those otherwise, It CEO, Genius. law. these subject information to and based information based to various The filings and statements forward-looking available assumptions the limitations, required company on and be estimates of to over is forth the are as obligation Good including whether are statements Andy, are reliance call. by as The on except of with to result go new While or Company this my now as placed pleasure current or the statements without day set such call update and in alter any ahead. turn uncertainty, Heyward, of Chairman any forward-looking the us reasonable, forward-looking are undue statements should risks not and please

Andy Heyward

the call to you in hear afternoon, because Brands quarter. I'm to Then International. on results phone it Chairman to our before third Heyward, few questions, I'm to I our I will Genius put discuss for Rebecca Michael. this before going prepared To to the we financial Michael, am of Thank about remarks for your start a over everybody. brief our you, Good there. is going turning begin talking the the breathing conclude say our outlook CEO Andy afternoon, who before microphone company. your ask we about Hershinger, words business taking CFO, going mute, and by

in of many As and of length powerful at the value company. represents the monetization Genius but the the Those for talked can and I have investors two Kid Each many pillars attest two is of many company creation about in of pillars the has combination monetization creation the of the brands these our valuable followers dynamic and core a our Channel. and its years. for own our of industry a cornerstone that of been right are

positive of The quarter continued the brands and progress was third channel. both the one for

am as a to aspects different did talk than Following had Rebecca's a they just going remarks, profile in each our detail both about I of ago. business the more year decidedly

but On are ago. is jump to XXX year episodes Kid I the a a compared to year the today ago. channel production million Similarly, have content in has the ago. very XX development. guess X about am -- million in catalog of Currently and or done Channel compared a that’s looking roughly been different brand This compared side, distinct last preproduction completed totaling in math in million XXX going that about we currently homes animated haven't content Monthly our I are today, XX% Genius we to have as a views compared have XXX and respectively, distinct in profile XXX,XXX is year year. XX the homes the XXX, to or at episodes to

robust a for for the XX from episodes, ago. goal is experience programs. licensed channel episodes having the third is to a Complementing metric up have programmer, content Another program, roster we the a XXX we only from licensed create of channel our any year vibrant Genius' of have channel parties. that’s line viewer important for by the Like

Finally, ethos I we these the announced -- of and the of consistent should company. the and channel all add episodes that are with

Amazon. an the demand quarter. end at into development subscription I $X.XX additional that now announced will our Prime. XX are important available Genius up. share a at the going end Prime's monthly who results. company's business Rebecca Plus! quarter our Kid a for I the over but about the channel call Hershinger, September, Amazon million subscribers Plus! first the as CFO, turn with Genius video we moments, Launched Rebecca, At It's our on to Cartoons few In Finally, we of discuss represents to business third fee third This on share of Amazon Kid Cartoons the details of on am foray business, the will you

Rebecca Hershinger

and Genius Thank you, I will Hershinger, quarter. review Financial I Rebecca International. Brands Andy. Chief all financial unless Officer our third of our am financial statements This results of for the review now business accordance financial U.S. in Beginning prepared position, with around are continued our highlight noted I metrics our activity the investment brands. with our two out and point in will otherwise the GAAP. that

XX, earlier Andy's million December content, of XX, of monetized compared our discussion library growing our of investment XXXX. increased to television $X.X in $X.X as of and book million, augment to to XXXX, costs as September film First,

to until and top line recognition criteria from December royalties These such recorded XXXX around brands in as they XX, distribution as this advances activity Llama January as minimum are September rights domestic balance revenue revenue our deferred achieved. collected to worldwide reflecting been convert million from such of the guaranteed as Sony once $X.X XXXX, deferred of as revenue, and XX, royalties expansion guaranteed in well revenue times minimum Rangers. increased year, all from million the of as Second, highlighting to $X.X advances and have content our Rainbow production our total the of Llama

increase. months three Pop our $XXX,XXX advertising XXXX. XX, Space properties, ended Secret a This XX, That our due operations our one three $XXX,XXX of product third months Kid primarily the period. ended XXXX related with similar Turning increased Genius September and to related XXX% increase Total consumer Thomas to September activity positive for of without Channel Lab license represented combined statement revenue to to to prior the and was quarter content for was the momentum. activity the in Edison revenues from

Secret For of showing over due the nine period the increase improvement months period was period XX, This ended September modest revenue compared prior modest improvement to a period totaled XXXX, $XXX,XXX, to $XXX,XXX. and revenue, television prior and and content Space entertainment offset to licenses period. Edison royalties both compared to by distribution in home Pop, the Thomas related revenue, Lab to related fewer licensing

includes can among television start based period entertainment and criteria. completed satisfaction our period business achievement of criteria. filings, sales over to of and the other and content home acceptance of naturally in and license occur the period As we have The noted by and customer in on activity a recognition delivery related fluctuations the revenue criteria the

to expense, to product plan as primarily our the quarter Direct well as we a to studios, prior fluctuations writers, and Marketing the net XX, sales, these related sales XXXX the include contract they due compared Space period of could rendered expenses XX, spending the the related talent, comparisons to sponsorships the Marketing compared increased be of these As prior without of on nine our period, and obligated period cost as year costs agreement the launch period, the non-capitalizable post-production promotions share the services. in decreased to fees the distribution consultant period to in September expense profits period. participation ended such, make to prior and various cost spending of and agreements, months year prior as with to due to for a expenses creative certain during similar ended primarily on and Pop can film paid related for over September sales for well XXXX, operating months modest in film animation difficult. marketing other directors, three their depending and to pursuant amortization in the execution which, $XXX,XXX properties cost with promotional activity decreases which studios, period $XXX,XXX decreased television current Pop. have musicians Space

the prior and $XX,XXX of period. Space expense cost dollars, Secret During period, to months $XX,XXX Lab zero related and September television the ended participation amortization Thomas and related revenue and to of prior and Pop home increases of XXXX, entertainment increased television the current three expenses we These film recorded period Edison respectively. compared in XX, to $XX,XXX, to compared

salary period and During in the reflect same increases offset the share and to operating XX, period. period the months increases administrative prior in modest the decreased the nine compensation, XXXX, for ended based related de XXXX, XX, in from resulted increases same months in ended three total compared over cost the modest revenue in by primarily $XXX,XXX in General decreases costs the XXXX. minimis This September change wages. September direct

decreased by operations, administrative based in expense the months combination increases For the in the of in costs these ended expenses in bad expense. operating aggregate, in salaries improvements from, revenues XXXX. offset fees, from $XXX,XXX wages period. and professional In share loss and nine XXXX, debt and result and period our compared over September to same decreases XX, change compensation again, resulted This period general

that, September With million improved our period. period For nine will million prepared in the million $X.X loss turn three million about Again, XX, I back ended loss to company. to the the from September over for the just from from operations ended from remarks over operations prior now will to Andy prior period. during months XXXX, XXXX, improved the $X.X $X.X call months the conclude our who $X.X XX,

Andy Heyward

operational development, third as the our brands revenue assets around the Thank deferred quarter company. of it's currently the increasing investment showed in reflected that as are trends noted, activity and production positive in you. as Well, well continued coupled Rebecca balances, with core and in our

audience opening Llama on because series these parents but iconic continue continues our as I and children we as take with in as As we tremendous do to built well post-production post-production production book of Llama continue my anticipate a around as of We of have on promotion Rangers. resonate very series, library is and on going both is the Netflix alike. really going excitement Llama with to that on post-production partner shouldn’t to Llama which is completed strong. The monetizable Llama in began it, around is based I remarks, amount we our said grow now content Rainbow right Llama,

We commercial are -- will Rainbow our roster positive with capitalize children Netflix on its go via its messaging The business. poised we Similarly, to and XX. consumer be live on talent also a January will anticipated strong excitement success. merchandizing products that preschool to and believe for pedigree brand go the Rangers

the previously this past MIPCOM to and announced of Kid agreements of the licensing the channel [expo] MIPJunior markets, of of is to business, increase and the trade evidence the only our does the revenue seen this than this our side and expansion on diversifies already our have Not and to excitement fall. support important [ph] Not content less shows consumer but in brands merchandizing products key itself MIPJunior continuing industry the No with We mention Genius it all streams. Mattel. Channel. exposure our summer

positive to a the response a being similar MIPJunior model participant addition team poised content capitalize party shareholders. company our channel their future We to nothing Genius that at our couldn’t existed of distribution recognize sales the who for the and In this business to for well reaction more and for value a The for of garnered channel model. decades. of literally producers experienced both a as of excited in of is of on as industry MIPCOM, holds another distribution the third brands it's the our is new, content. channel creator be in

let firm. think free I Levay Michael, unable questions, up almost this listeners if to investor Before not available. to those are the you, I XX-Q his relations questions, XXX-XXX-XXXX. our are the to know course, in there contact number Porter any or Rose, publicly at probably how of we take feel is or everybody is number of knows call of to our Thank discussed matters we Michael want reach follow that comments but to Porter you. discuss pertaining on plans which we any ready to business limited information now and, and Operator, questions are take a And

Operator

question. first with Please Our from comes line Advisors. your of Instructions] Betten of Fargo the [Operator question proceed Wells Ron

Ronald Betten

that. guidance You that stock have sign a is for and your the their us plans usually good and, very it's been any statement in you why company and management shares. upon buying when obviously yourself that’s you own can back expand believe Can what but buying a give you or strong are

Andy Heyward

discuss continue was to you was stock this now am which for at can't form I much I at about Xs sure I a am to bargain And at Keep going the the I X.X not. Obviously, and price tremendous or buying it not think bucks. at see. I how liberty it the will at, moment that. that’s watching say is

Operator

Okay.

Please next question Park the of Capital. from your proceed comes Our with Faruk, West question. line Ishfaque

Ishfaque Faruk

content Very Media quickly on deal. DHX the

You Do Prime larger some much portfolio guys of from because of content got library deal? a subscribers broader brands from number deal. major a nice a expect the you that of

Andy Heyward

that mean you acquire Well, some certain it content called sought been a profile robust we has did In and profile have a we that that’s case content with to Originally have to our competitive. enrichment have defining that company we to be it. purpose the by of offering a it's we always the that acquire. content to has and and particular

educational all find anything will something a even there it's certainly, that curriculum. never Sometimes is It's you negative. involved, content

find won't won't you won't you language, violence. inappropriate negative stereotypes, find You find

an imitable You fitting put can objectionable things that with and subscribe we and acquired that grandparents, kids that their in these be into were would were caregivers, we lend won't which front of a people parents environment And channels that find channels, with. themselves who teachers, the these to would we familiar that comfortable feel for parent. to are behavior believe ones programs

Ishfaque Faruk

quarter? for All What TV entertainment right. that more it lot. Rebecca, and And a terms one the up of went components your of revenues, this were home Rebecca. in

Rebecca Hershinger

Space and did a Thomas Edison. We have related Sure. some in licenses offering back had There of We primarily Edison releases. of different related Thomas press few the look a Pop. was America at sizable to a number Latin to

Ishfaque Faruk

during And the those revenues were quarter? the main the drivers of

Rebecca Hershinger

Exactly.

Operator

comes Instructions] your [Operator the with next Joe question. line of of from Please question Reda Group. proceed Special Our Equities

Joe Reda

changer You XXXX. are maybe be for their are of the through, a game you company walk small Amazon the you company, subscribers? are to in Could So, but to have Amazon process bigger is going What much obviously, plans how subscribers? a a budget limited deal could only us the attract they company. get

Andy Heyward

Good question. Okay.

off subscription other not start KIDS, is two One are PBS putting olds. Amazon that saying stops channels if basically ourselves. they me Let are with PBS familiar at has is forth. by the that KIDS, four only year it, you

much would your on ever and purchases that was any your know made scientists. and exact bought anything all about base. profile their the they everything of we -- the child, with And Our perform is that’s fortunately The is Amazon, them. broader goes company to buying buying for of They up content of It's not their felt, they that is habits, probably And this subscriber you data a you customer tastes from offering that olds. about you demographics, if the for that year a looking are who this have the have. your customer that channel is are XX that child. they who have interests us for customer parents the know subscriber, with the

a doing and Amazon looks the to number take with I being you with participating That of is that and initiatives a and in It with you, them. base organic week we be live just went Amazon. promotion with terrific. And started been is done the doing that be channel, it customer that will organic of are look. tremendous are is And haven't going of go done marketing their this if co-op a and that marketing and We to to encourage just with marketing them. on we any amount

in bloggers, going influencers this be with are done reach be to continuing we be the own we In addition and that the able and that initiatives it. to going that are going outside, to with mommy channel that our separate to that with that would places noise on moms to we are have will subscribe

Joe Reda

Great. Because, recognize growth. stock finally Street obviously, some to Wall start will subscriber see Okay. they your once

Andy Heyward

stated will we on having that you with we we the know the those share numbers to the think be on of able already channel the subscriptions start you. beginning will Yes, I have year, come and

this is enthusiastic where highly going. are about We

of what doing kids. little Parents their is that We anecdotal out and had already. and this are are like concerned have lot about I out the call there and there. It's very more there very the, calories more Kids empty very, been positive increasingly feedback viewing. for more are

demand it. for product are With the what three-year a on compression, We a this and video to a parents environment. age olds about Smartphone use is And what where their they know in kids how a want tablet very who find and attractive them. are seeing, concerned want, they to live

Operator

further the remarks. would to questions turn no of management over portion I for the like to are the over There now conference audio back conference. closing

Andy Heyward

know you are and and we Porter something don’t we going I to said are Thank everything. has say. watching. Michael excited if where very everybody to We keep

Operator

today's conference. concludes This your participation. Thank you for

disconnect lines You of this your your rest Have day. wonderful may time. at a

Kartoon Studios (TOON) 15 Nov 172017 Q3 Earnings call transcript